El Salvador May Launch National Stablecoin: Reports

Investigative news outlet El Faro reported that El Salvaodor’s government was planning for its citizens to use a stablecoin—as well as Bitcoin.

By Mathew Di Salvo

In brief

• El Salvador made Bitcoin legal tender in June.
• A newspaper in the country now claims that the government was planning to release a national stablecoin.
• The government says the plans were scrapped.

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El Salvador’s government could be planning to release a U.S. dollar stablecoin, investigative news outlet El Faro reported Friday. The currency would be issued by the central bank, pegged to the value of the U.S. dollar and backed by reserves of real U.S. dollars.

Videos of private meetings obtained by El Faro show the El Salvadoran president’s brothers, who are not part of the government but frequently advise the president, planning to launch a national U.S. dollar stablecoin by next year. 

The cryptocurrency would be called the “Colón-Dollar,” a reference to the country's former national currency that was replaced with the U.S. dollar in 2001. 

El Faro reported that a government spokesperson said the plans were scrapped—but went on to claim that the plans are still underway, quoting a “source familiar with the negotiations.” 

Some meetings cited by El Faro happened after President Bukele announced in June that Bitcoin would become legal tender in the tiny Central American nation. Senior government officials, private contractors and external advisors attended, reported El Faro.

The brothers added that they would like all cryptocurrencies to become legal tender in El Salvador. “But for that to happen we need government infrastructure that is up to the task for what’s ahead,” said Bukele’s brother, Ibrajim, according to El Faro.

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